This article brings you 5 hot stocks hedge fund managers love right now. These stocks have seen especially high volume recently, and we think all 5 deserve a look. As always, use the list below as a starting point for your own due diligence.
Omnicom Group (OMC):
OMC has recently caught the sight of hedge fund managers and it has been actively traded since last few weeks. The reason for this is quite obvious. Omnicom had called a meeting to announce the earnings for the second quarter of fiscal year 2011 and the results are positive. The company has announced strong operating results for 2011. OMC is a hit this week, since the analysts believe the stock’s value is going to almost double in the following year. The stock is currently traded at $38.72 while the 52 week low is $36.23. Pretty close to its 52 week low, the stock is attractive for large investors. Historically, the stock has performed well-- it traded around $55 in 2006, while it lost more than 60% to rest at $20 a year later. Since then OMC has performed considerably better to regain more than 50% of the lost value. P/E, the price to earnings ratio is 14.74 while dividend payout is 2.58%. That too is slightly better than T-bills or 10 year fixed deposits. OMC had the highest quarterly growth (14.70%) amongst its competitors namely WPP Plc. (WPPGY), The Interpublic group of companies (IPG), and the Publicis Group SA (PUBGY.PK). The industrial average growth for the last quarter was 11.60%.
American International Group (AIG):
AIG lost $41.41 this year as it tumbled to its 52 week low $21.46 from a 52 week high of $63.87. Currently the price rests at $23.66. It is a little bit tactical at the moment, but big money investors are into AIG. It is available at a price cheaper than ever, but a challenging 2011 fiscal year lies ahead. AIG has been undergoing restructuring since 2008 and it has shredded many of its diversified business since then. The company suffers through income generation problems and has a tough year ahead, but investors think that its restructuring will get some positive results; although not pretty much apparent. For those who already hold the stock, they should stick to it and wait-- keeping the AIG track record in their minds. But the stock is not a win-win buy for those looking for certain profits. Dividends have been ceased and the competitors are not good either. Major competitors include Allianz SE (AZSEY.PK) and AXA (AXAHY.PK), who also lost more than 50% of their values in the last 6 months or so.
International Speedway Corporation (ISCA):
With a dividend yield of 0.79%, ISCA trades at $24.14 at the moment, which many analysts think is an undervalued price. ISCA is influenced by NASCAR, and it can see huge profits through upcoming projects. We saw a sudden jump in ISCA's price yesterday, as it gained $1.46 in a single stroke. Price to earnings ratio is 20.80 which can be quoted as quite notorious, but somehow ISCA has managed to gain some momentum as many investors traded huge volumes in the previous week. With future earnings being heavily linked with NASCAR, the demand of racing sport fans is likely to burst suddenly if a single season is a hit. Fortunately for the investors, ISCA suffers at this moment, and the prices are deliberately low to buy. For long term buyers this is a real win-win buy. Dover Motorsports (DVD) is a direct competitor, as is Speedway Motorsports (TRK). TRK offers investors a higher dividend payout at 3.10%, hence it's a little bit safer than ISCA because it has a definite income stream-- even if share prices don't appreciate.
Mercury Computer Systems Inc. (MRCY):
MRCY stock also witnessed great movements over the past week, while it is being traded at $13.06 near its 52 week low, with a 52 week high reaching $21.92. Earnings per share are $0.71, while dividends are negligible. Riskiness is medium, while the short and long term advice for this stock is to hold it as long as you can because it is suffering from several sources. This stock is expected to lose more than 10% in the coming weeks and it has not performed well over the past month. MRCY is not the best option to buy here, however holding for long term gains can be considered, as news about management focus and changes have been in the market. In early August some spectators viewed MRCY as undervalued. Among the competitors Analog Devices Inc. (ADI) and Analogic Corporation (ALOG) have been doing well, while CSP Inc. (CSPI) is struggling too. MRCY is not recommended in volumes but can be a moderate risk buy.
Staples Inc. (SPLS):
SPLS is trading at $13.81, and has shown profits and increased earnings for the recent quarter. Quarterly revenue growth is 5.20% and it is the highest profit generator amongst its competitors which include Office Depot Inc. (ODP) and Office Max Inc. (OMX). Its profit is also higher than the industrial average. Earnings per share are $1.30. For 2nd Quarter fiscal year 2011, Staples Inc. announced excellent operating results, it's worth mentioning considerable expansions across different product lines. As the market moves towards stabilization, SPLS can hope to improve its financials better than ever before. SPLS currently trades at lower costs and has a dividend yield of 2.87%. It is time to buy this stock against a minimal risk, as it is expected to gain momentum heavily. SPLS traded quite furiously in the recent past, thanks to investor confidence in Staples’ management. According to a recent stock analysis, SPLS has prospects for 100% growth in the coming fiscal year 2012, hence it is the best available option for medium risk takers.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.